To study the roles that homeobox genes play in organogenesis, mice with a null mutation of the divergent homeobox gene Hex were generated. These mice prove that Hex is essential for liver specification and budding. Hex is the first gene known to be necessary for this critical developmental event - an event that is dependent upon inductive signaling between the foregut endoderm and adjacent cardiac mesoderm. Hex expression, in addition to being restricted to the ventral foregut endoderm at the stage of liver specification and budding (E8.5), is also seen in the liver throughout all stages of embryogenesis and in the mature liver, in mature hepatocytes as well as the bile duct epithelium of intra- and extra-hepatic bile ducts and the gall bladder. In this proposal the following hypotheses will be tested: I) Hex controls the inductive events in embryonic foregut endoderm and adjacent cardiac mesoderm necessary for liver bud formation and determination of the hepatic cell phenotype; 2) Hex is necessary for the differentiation of hepatoblasts into hepatocytes and biliary epithelial cells and for bile duct formation: and 3) there are specific enhancer elements that direct Hex expression in the foregut and liver. To test these hypotheses and to provide insight into tile role Hex plays in the development and function of the liver, three specific aims are proposed. 1. To define the function of Hex in hepatic specification and liver bud formation by analyzing the expression of liver-enriched transcription factors and signaling molecules in Hex -/- mice and by performing tissue recombination between wild-type and mutant hepatic endoderm and cardiac mesoderm in culture. 2. To determine the role of Hex in the differentiation of hepatoblasts into mature hepatocytes and bile duct cells and in bile duct formation using Hex conditional knockout mice. 3. To determine the enhancer elements directing Hex expression in the foregut endoderm and liver in vivo in order to identify the transcription factors regulating liver-specific expression of Hex. The long-term goal of this project to discover novel pathways directing liver development and liver cell differentiation in vivo using the powerful tools of mouse genetics. The knowledge gained from these studies is applicable to the diagnosis and treatment of many debilitating childhood liver disorders, including biliary atresia, bile duct paucity syndromes, and repair from injury. In addition, the insight gained by our studies of the determination of hepatic cell types will contribute greatly to the effort to derive functional hepatocytes from multi-potential stem cells.